Century 21 Accounting Chapter 3

Classified balance sheet – A type of balance sheet that groups together accounts of similar nature and reports them in a few major classifications
profitability – measure the operating success of a company for a given period of time.
Petty cash – Amount of cash kept on hand & used for making small payments
stop payment order – an order by a depositor requesting a bank not to pay on a check previously issued
Adequate Disclosure – financial statements contain all information necessary to understand a business's financial condition
Sole Proprietorship – – owned by one person.
Advantages include that it is the simplest form of business organization and there is no double taxation since it is a "flow thru" entity.

Legally, the owner is responsible for the debts of the business and lawsuits against it, which is a disadvantage.
Disadvantages
also include more difficult access to capital markets and that the "life" of the business is linked to that of
the owner

Income Statement – The financial statement that reports the "bottom line" for a business.
the assets, "supplies" decreases when the supplies are used up. As the asset is used up, an expense occurs – the asset becomes an expense
The preterite of regular verbs–question 7 Reminder about instructions: complete each sentence by giving the correct preterite form of the verb supplied for you in parentheses. Special letters, should you need them:  á   é   í  ó   ú   ñ Tú me [l1] (oír), ¿verdad?
asset – anything of value that is owed
Rate – the annual percentage rate used to compute interest.
Examples of assets – Cash, merchandise, furniture, fixtures machinery, buildings, and lands
Explain the role of the balance sheet. – The balance sheet is a permanent document that is used to record what you own (assets) and what you owe (liabilities) on a specific date. The balance sheet provides a snapshot of your financial position. The difference between the value of what you own and what you owe represents your net work.
Cost Accounting Standards – CAS – Federally mandated accounting standards intended to ensure uniformity in budgeting and spending funds.
Monetory concept – All transactions are recorded in New Zealand dollars
The preterite оf regulаr verbs–questiоn 7 Reminder аbоut instructions: complete eаch sentence by giving the correct preterite form of the verb supplied for you in parentheses. Special letters, should you need them:  á   é   í  ó   ú   ñ Tú me [l1] (oír), ¿verdad?
What are business processes? – Acquisition/Payment, Conversion, Sales/Collections
GST Collected & GST Payable – GST collected = we collect from the customers
GST Paid = paid to supplier for our purchase
GST Payable/Receivable = GST Collected – GST Paid
If there is more GST collected than GST Paid = GST payable. We classified it as current liability because the business owe this amount to the ATO.
If there is more GST Paid than GST collected = GST receivable. We classified it as a current asset because the business expects to receive this from the ATO within 12 months.

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